My Investment Record (24) - 31st August 2015 & 30th September 2015

Market Overview

Last two months KLCI  hit its lowest point within three years at 1532.14 pt, end up at 1612.74 pt and 1621.04 pt at end of August and September respectively. 

Brewing of 1MDB scandal, anticipation of Fed rate hike, and consistently lower crude oil price results in capital flight out of Malaysia, pushing the ringgit lower and thus tumbling the stock market. 

However, with the annoucement of Value Cap by Najib Administration and subside chance of Fed raising rate this year, KLCI began to stabilize and should perform better as the end of October. 

Current Return and performance

For August 2015, 

The estimated holding period return for KLCI in the past period (1st August 2015 - 31st August 2015) is -6.12% (with dividend included). Holding Period return for my portfolio, is -9.42%. Total holding period return for my portfolio since the inception is -2.46%, annualized to be -0.83%, this is far lagged behind KLCI total return of 8.35% (annualized, 2.79%) 

For September 2015, 

The estimated holding period return for KLCI in the past period (1st September 2015 - 30th September 2015) is 0.82% (with dividend included). Holding Period return for my portfolio, is 2.83%. Total holding period return for my portfolio since the inception is 0.30%, annualized to be 0.10%, this is far lagged behind KLCI total return of 9.23% (annualized, 2.91%) 

Trading Activities

1. Addition of RHB Cap (1066), with impending right issues the stock is currently trading at P/E ratio of about 8, one of the lowest among its peer. As Q2 earning was still steady, this provide a comfortable safety margin for me. 

2. Addition of Maybank (1155). its currently trading at P/E ration of about 12, with projected dividend yield of 7%, which is good for me. 

3. Addition of Public Bank (1295), Public Bank is the MVP stock, it seldom come cheap, when it does, i will just add on . 

4. Addition of Symphony Life (1538), this property stocks have attractive dividend yields with huge unbilled sales and landbank, even though most of the sales may not be realized as profit in this financial year, it still a good bet in the long run. 

Snapshots on what my performance constitute for

Figure 1 shows the stocks that i currently hold, with average cost and current value. The total cost of investing will not be equal to the net capital i invested in, as i do reinvest dividend from stocks (Total about RM 14,000) and realized capital gain (Total about RM 10,400). 

Total Holding Period Return measures the performance of RM 1 invested with me starting day 1. 

The formula will be 

(1+ HPR1) * (1+HPR2)*...*(1+HPRn), 

where HPRn is the holding period return for particular period, measured as change in total portfolio value, and 

current portfolio value = Total capital invested + total unrealized gain/loss + total realized gain/loss + total dividend gain. 

The holding period return measured is better than the straight comparison between the total capital invested and total portfolio value now, this is due to my portfolio sustain greater loss lately when higher capital had been invested, thus resulted in less negative impact on the holding period return. The summary of period holding return vs KLCI return is as per figure 2. 

Figure 1: Summary of shareholding now

Figure 2; Summary of Holding Period Return

My Investment Record (23) - 31st July 2015

Market Overview

KLCI end up higher in 1723.73 point, political fighting in Malaysia seems to dominate the theme of discussion in the market. Until there come to a solution state, it will be unlikely for the investor (local retail or foreign) to restore confidence and re-enter the market. 

However, i believe institutional investors who have the ability to hold longer, will continue to be the supporting forces for KLCI. There is however a higher risk that current political instability and ringgit fall will continue to manifest into a bigger storm, ultimately land as crisis  to the country. 

Current Return and performance

The estimated holding period return for KLCI in the past period (1st July 2015 - 31st July 2015) is 1.25% (with dividend included). Holding Period return for my portfolio, is -1.02%. Total holding period return for my portfolio since the inception is 7.69%, annualized to be 2.57%, this is far lagged behind KLCI total return of 15.42% (annualized, 5.04%) and lower than return from Fixed Deposit.

Trading Activities

1. Addition of MNRB (6459), which seems to be a loosing bet for now, as the board of directors didn't recommend any dividend for current financial years. The majority shareholders (the institutional investors might be ok with it or they want it that way), but the minority shareholders will often be loosing out when the company stop paying dividend even for a while only. 

My Investment Record (22) - 30th June 2015

Market Overview

Bursa Saham end up in 1706.64 points, 40 points lower compared to closing of previous month. 

Two events dominated KLCI performance in the past month:

- Possible of rating down grade by Fitch

- Possibility of greece defaulting from its loan. 

Both event pro-long the decline of ringgit against major safe heaven currency (like US dollar), 

which further putting pressure on local stock market (KLCI) performance. 

However, as Fitch revised the rating outlook for Malaysia, i will expect KLCI stopped its decline for next July, while trading narrowly waiting for the impact of GST to corporate earning become obvious in next cycle of financial reporting. 

Current Return and performance

The estimated holding period return for KLCI in the past period (1st June 2015 - 30th June 2015) is -2.06% (with dividend included). Holding Period return for my portfolio, is -0.44%. Total holding period return for my portfolio since the inception is 8.79%, annualized to be 3.02%, this is lagged behind KLCI total return of 13.99% (annualized, 4.73%) and lower than return from Fixed Deposit. 


Trading Activities

1. Addition of MNRB (6459),  loss shown in quarter 3 seem to be short lived as the company quickly turn into black and record EPS of 60 sen per year. This translate to P/E ratio of about 6-7, with P/B ratio still less than 1. With current cash level, i believe the next dividend will be around 20 sen, translate to dividend yield of more than 5%.  The worrying sign however is that, the total revenue seems to be stop growing. 

2. Addition of Symphony Life (1538), its unbilled sales increased significantly from 196 million at FY 2015 Q2  to 469 million at FY 2015 Q3 and 667 million at FY 2015 Q4, guarantee of at least 2 years revenue in the future. Thus with current P/E about 6, and Price to book value around 0.4, and recently announce dividend (not yet approved by shareholder) of 5 sen (translate to dividend yield of more than 6%), the company looks attractive to me. Not to mention the company still sit on top of large parcel of land in sungai long which had yet to start develop. 

Some signs need to take note of is the quick build up of inventory level, and whether the projects launched will be take up 100% in the end. 

My Investment Record (21) - 31st May 2015

Market Overview

Bursa Saham end up in 1747.52 points, 70 points lower compared to closing of previous month. 
Few events affecting KLCI's performance in short term horizon, 
- Possibility of Fed raising rates, resulted in net sell off of foreign investors in May?
- 1MDB saga, where its debt woes are worsen by downward trend of Ringgit following crude oil price crash. It will be interesting to see how negative the event can unfold. 
- Effect of GST, that will hit hard on retail & consumer's sectors performance.

- X factor, MERS outbreak, if uncontrolled like SARS, could hit asia economies hard. 

Current Return and performance

The estimated holding period return for KLCI in the past period (1st May 2015 - 31st May 2015) is -3.62% (with dividend included). Holding Period return for my portfolio, is -1.75%. Total holding period return for my portfolio since the inception is 9.27%, annualized to be 3.28%, this is lagged behind KLCI total return of 16.39% (annualized, 5.67%) and lower than return from Fixed Deposit according to best available market rate.

Trading Activities

1. Addition of Affin holding (5185). My rationale behind was this, there are few types of industry that is perceived to last long, and return moderate profit to the shareholder, these includes infrastructure (toll way, utilities, telekom), finance and banking business, FMCG (fast moving consumer goods). In current KLCI market, it seems banking and finance sectors is the only sector left with low P/E ratio, high dividend yield and back by low P/B ratio.  Sometimes my bet might go sour (like previous bet with CIMB and current bet with Affin holding), sometimes my bet remain promising (with Maybank and Public bank). 

2. Addition of Maybank (1155). First quarter profit went up but price still go down, at anticipated dividend rate current price offer a dividend yield of close to 6%. Seem acceptable for me. 

3. Addition of Public Bank (1295), a balancing act continuing from previous trading month (see here). Seem to pay off for me for now. 

My Investment Record (20) - 1st May 2015

Market Overview

US 1st Quarter GDP data came out surprisingly weak with growth of 0.2%, 

Fed is holding its move on next rate hike, consensus now looking at the earliest hike in september, 

Market become nervous, 

KLCI pare its early gain in the month and end up with 12 points lower than opening of the month (1818.27 pts currently). 

And here the theory,

A meltdown of the market usually triggered by sheep herd behaviour, where exiting of one group of investors follow by another. 

In Malaysia case, it will most likely be foreign investors who sell off first, then local retail investors who under margin call, and finally the remaining local retail investors. Institutional investors (like EPF, ASNB, Public mutual) etc seldom sell off as they investing strategy is to hold for long term. And the institutional investor often become key stopper of the fall/crash. 

And when market become sentimental, anything could happen and it will be likely those who ride the first wave (whether selling from a peak or buying from a trough) will gain in this cyclical market condition. My prediction is KLCI will remain cyclical in current level at least until Q2 economy data is out, if the outlook is positive only then a move to break 1900 pts become possible. 

Current Return and performance

The estimated holding period return for KLCI in the past period (1st April 2015 - 30 April 2015) is -0.42% (with dividend included). Holding Period return for my portfolio, is 1.09%. Total holding period return for my portfolio since the inception is11.22%, annualized to be 4.07%, this is far lagged behind KLCI total return of 20.76% (annualized, 7.33%) and just about the same as return from Fixed Deposit according to current market rate.

Trading Activities

1. Disposal of  PohKong (5080), When i first start my investment portfolio, i made a few mistakes which resulted in poor performance of my portfolio compared to KLCI, This include, ignore how the huge inventory level (even the inventory is ready to sell) can influence the performance of particular company (in this case, gold inventory to PohKong and Tomei), ignore how the controlling stake holders can  act in the interest of its own while sacrificing the interest of minority shareholder (PohKong, few chinese stocks). The only chance to correct those mistakes is when the shareprice rise according to tide. Which i did for Poh Kong recently.  

2. Disposal of  Public Bank (1295), Public bank is a good stock that seldom disappointing its shareholder,  But viewing its current share price level and in anticipating of upcoming volatile market condition,  partial disposal of it is one of my strategic move to accumulate some cash and prepare for any short term slump in share price. The strategy might or might not paying out. 

My Investment Record (19) - 31st March 2015

Market Overview

Last month, KLCI declined initially by 40 points into 1778.16 at 11th March, before slowly climbing back to 1830.78 level, 10 point higher than previous month closing. I believe for the next few months KLCI will probably trading around current level, until the effect of GST to Malaysia economy and corporate earning become clear. 

However, oversupply in crude oil market exemplified by the agreement of Iran nuclear deal might caused a burst in US shale oil & gas sector (see here). On the other hand, China is showing every signs of economy slow down (see here, here), the spread over effects to Malaysia economy might cast a shadow to future of KLCI index. 


Current Return and performance

The estimated holding period return for KLCI in the past period (1st March 2015 - 31st March 2015) is 0.79% (with dividend included). Holding Period return for my portfolio, is -1.45%. Total holding period return for my portfolio since the inception is10.02%, annualized to be 3.77%, this is far lagged behind KLCI total return of 21.27% (annualized, 7.75%) and just about the same as return from Fixed Deposit according to current market rate.

Trading Activities

1. Addition of MNRB (6459), although recent quarter results showing a loss for the insurance company, overall i still believe in the long run, insurance company like MNRB will remain profitable and produce handsome return. With share price cost only 2/3 of the book value per share, MNRB looks cheap for me. 

2. Addition of Symphony Life (1538), its unbilled sales increased significantly from 196 million at FY 2015 Q2  to 469 million at FY 2015 Q3, sign indicating that the company still has business ahead. Thus with projected P/E less than 5, and Price to book value around 0.4, the company looks attractive to me. 


Others Investment Notes

When tracking their performance with the market, others often didn't include the fact that stocks in KLCI index do pay dividend. Thus, they will often be able to show their results to be superior/close to the market performance. However, as the average dividend yield of KLCI stocks will be about 3.2%, this will often have a significant impact on whether your portfolio is outperform/underperform compared to the market. 

Taking my performance as example, if we take the dividend component out, KLCI annualized return will be close to 4.5% only, which is still superior, but not far away from my annualized return of about 3.8%.  

Holding high cash position in the long run when stock market is expected to go up at rate higher than Fixed Deposit's rate will hurt one's performance. This can be shown by ICAPITAL's last 4 years (including current FY) results. 

My Investment Record (18) - 28th February 2015

Market Overview

During the CNY month, KLCI slowly climb up 40 points, perhaps due to satisfactory corporate earning announcement. The external economic environment trend hardly changed, except for Greece at the brink of defaulting, while ECB start its quantitative easing program. Besides, as China is experiencing slow down, its central bank start to cut interest rate. When credit become cheaper across the globe, we can expect equities price to start its climb until unsustainable level. 

Current Return and performance

The estimated holding period return for KLCI in the past period (1st February 2015 - 28th February 2015) is 2.52% (with dividend included). Holding Period return for my portfolio, is 2.79%. Total holding period return for my portfolio since the inception is 11.64%, annualized to be 4.50%, this is far lagged behind KLCI total return of 20.32% (annualized, 7.68%) and but still higher than return from Fixed Deposit according to current market rate. 


Trading Activities

1. Addition of MNRB (6459), although recent quarter results showing a loss for the insurance company, overall i still believe in the long run, insurance company like MNRB will remain profitable and produce handsome return. With share price cost only 2/3 of the book value per share, MNRB looks cheap for me. 

2. Addition of RHB Capital (1066). with latest quarter results out, RHB capital P/E ratio current stand around 10, low compared to other banks and other KLCI stocks. Few reasons why RHB's share price was low was due to possible default by 1MDB on its 2 billion loan ( RHB portion = 32%), resignation of its CEO, and fallout of merger plan with CIMB. However, with Ananda Krishnan allegedly came to the rescue (source) for 1MDB, thus repaying the loan to RHB,  my bet is RHB's business will remain stable for upcoming years. 

3. Addition of Symphony Life (1538), its unbilled sales increased significantly from 196 million at FY 2015 Q2  to 469 million at FY 2015 Q3, sign indicating that the company still has business ahead. Thus with projected P/E less than 5, and Price to book value around 0.4, the company looks attractive to me.